Varun Beverages Ltd (VBL), the largest franchise bottler for PepsiCo, has officially declared its strategic initiative to acquire the complete business operations of The Beverage Company Ltd in South Africa, along with its wholly-owned subsidiaries collectively referred to as 'Bevco,' for ₹1,320 crore. This development was disclosed through a regulatory filing, where it was revealed that the Board of Directors has given the green light for the acquisition of a 100% stake in The Beverage Company (Proprietary) Ltd, South Africa, and its subsidiaries, with an opportunity for minority co-investment from a substantial equity fund.
Bevco actively engages in the manufacturing and distribution of both licensed (PepsiCo Inc) and proprietary non-alcoholic beverages. It holds franchise rights from PepsiCo Inc in South Africa, Lesotho, and Eswatini, and possesses distribution rights for Namibia and Botswana. In the fiscal year concluding on June 30, 2023, Bevco achieved noteworthy sales volumes, reaching 117 million 8oz cases and contributing to a consolidated turnover of ZAR (South African rand) 3,615 million.
Upon the successful finalization of the acquisition, VBL will secure a 100% equity share capital of Bevco and its subsidiaries, with the potential for minority co-investment from a significant equity fund. This strategic maneuver aligns seamlessly with VBL's expansion vision, providing the company with the opportunity to capitalize on Bevco's well-established market presence and reinforce its collaboration with PepsiCo Inc.
The completion of this acquisition is anticipated on or before July 31, 2024, contingent upon regulatory approvals, including those from PepsiCo Inc and the Competition Commission South Africa. This landmark transaction positions VBL to strengthen its foothold in the African beverage market, marking a substantial stride forward in the company's overarching growth trajectory.